The UK convenience channel’s value is set to soar by almost 18% to £47.2bn by 2023, according to a new IGD report.
IGD said store development, speedy service and diversification into food to go are set to be the main drivers of growth over the next five years as retailers seek to maximise sales.
“New store development will continue to be a key engine for the channel over the next five years, with the co-operatives, symbol and multiple retail segments leading the way,” said IGD senior business analyst Patrick Mitchell-Fox.
“However, with the multiples taking a more conservative approach to expansion, we expect there to be an increasing focus on driving sales from existing stores too. This makes for a very positive outlook for convenience retailing and it remains one of the fastest growing channels in the UK food and grocery market.”
Mitchell-Fox said that ways to unlock growth within the sector included providing speedy in-store service, improving store layout so shoppers could find products more quickly, and introducing a payment system where shoppers can purchase products via their devices.
He also highlighted the role of post-millennial shoppers, who had become used to stores with longer opening hours and a wider range of products than the generations that came before.
Mitchell-Fox said that retailers were increasingly exploring alternative profit streams to increase sales.
“While topping up the weekly shop remains the main reason for shoppers to visit convenience stores, retailers are also focusing on driving other ways to encourage shoppers into store with more enticing ranges of food to go and evening meal solutions,” he said.
“While some traditional categories, like tobacco and news, are in decline the rise of new footfall drivers such as fresh coffee and services like parcel collection are encouraging more shoppers into store more often. In addition, the growing provision of ‘dwell space’ is also encouraging shoppers to spend more time in store.”